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(2) Member State of the European Union3. Since then, the dawn of a new era of Polish economy has been introduced and fueled by this membership in previously unimaginable ways. The purpose of the present article is to introduce the results of carried out own research works based on specific procedure of diagnosing and positioning organizational situation represented by chosen Polish companies running their businesses during a particular period of time from 2004 to 2013. It has to be menti]oned that the research is based on the assumption that organizational situation of given firm depends on the level of its organizational effectiveness considered as the full measure of closing results (doing the right things), in a different way than efficiency which focuses on activities (doing things right). Finally, organizational situation of given company is determined by the level of its organizational effectiveness or ineffectiveness, where the first introduces relatively good organizational situation, while the second implies worsening situation and reveals that researched company is dysfunctional4. Organizational situation represented by researched business entities concentrates on their effectiveness because “organizational effectiveness is a broader construct that captures organizational performance”5. The following detailed definition describes and much more clearly distinguishes between organizational performance and organizational effectiveness: “Organizational effectiveness is broader and captures organizational performance plus the plethora of internal performance outcomes normally associated with more efficient or effective operations and other external measures that relate to considerations that are broader than those simply associated with economic valuation (…)”6. Nevertheless, it has to be noticed that there are opinions according to which “the terms ‘performance’ and ‘effectiveness’ are used interchangeably because problems related to their definition, measurement and explanation are virtually identical”, and “(…) a survey of four leading management journals shows that the two concepts are not independent and that until 1978, effectiveness and performance dominated the literature interchangeably. Since then, performance has become the most dominant concept”7 . However, there has been drown a distinction between ‘performance’ and ‘performance measurement’ according to which they “must not be confused; the former represents an outcome whereas the latter is a measurement tool”, as well as “organizational effectiveness represents the outcome of organizational activities while performance measurement consists of an assessment tool to measure effectiveness”8. See more A. Z. Nowak, Poland in the European Union: Advantages and Threats, [in:] J. Kułakowaski, A. Stępniak, S. Umiński (eds), Strategy of Poland’s Membership in the European Union, Uniwersytet Gdański, Ośrodek Badań Integracji Europejskiej, Urząd Komitetu Integracji Europejskiej, Warszawa 2004, pp. 91–103. 4 Organization (company, firm) is dysfunctional when does not keep required level of organizational effectiveness. 5 K.. Cameron, D. Whetten, Organizational effectiveness: One model or several? [in] K. Cameron, D. Whetten (eds), Organizational effectiveness: A comparison of multiple methods, Academic Press, New York, pp. 1–24 after P. J. Richard, T. M. Devinney, G. S. Yip, G. Johnson, Measuring Organizational Performance as a Dependent Variable: Towards Methodological Best Practice, Journal of Management, Vol. 35, No. 3/2008, pp. 718–804. 6 Ibidem. 7 J-F. Henri, Performance measurement and organizational effectiveness: Bridging the gap, Managerial Finance, Vol. 30, 6/2004, pp. 93–123 8 Ibidem. 3. 18 . Zeszyty Naukowe Firma i Rynek 2014/2(47).
(3) The research objectives are realized from the perspective of potential influences of Poland’s accession to European Union on the researched firms. All diagnoses are based on qualitative, long lasted depth analysis of adequately selected companies by means of author’s model named “The Business Life Cycle Model of Organizational Effectiveness Influenced by Dysfunctions”. The measuring instrument (grading system) of this model helps to introduce the results of the research work. All these collected outcomes of each individual diagnosis give the picture of overall organizational effectiveness within given company annually, during the whole period of the research. The outcomes are visualised making the most of the model.. The model used to carry out the research and its specifications The business life cycle model is a theoretical construct reflecting hypothetical, somewhat simplified (but not oversimplified) picture of organizational reality, which starts with the premise that real business life is a cycle and consists of predictable sequence of successive stages that an organization (company, firm) goes through from beginning (creation) to its conceivable closure (liquidation or even bankruptcy). The Life Cycle Model of Organizational Effectiveness Influenced by Dysfunctions helps to recognize the way dysfunctions influence organizational effectiveness within companies operating in an increasingly turbulent, complex and demanding environment9. What is more, the model facilitates organizational diagnosis and displays synthesized picture of organizational situation represented by given company. In this context, it has to be mentioned that in an unavoidable way “(…) a modern business organization faces many formidable obstacles nowadays, caused by substantial changes of its most powerful but turbulent environment”10. However, “in spite of these adverse circumstances, every single organization exposed to severe environmental changes has to cope with emerging difficulties daily in order to survive and being aware of risk creates better conditions for uncertain future”11. The model seriously reinforces the procedure of organizational analysis and assessment. They both help to examine organizational situations in researched firms, especially being under the pressure of mentioned environmental configurations and, finally, synthesize all the outcomes and depict them on its scale. The concept of the model is based on the change of the paradigm which require maintain permanent stability of organizational situation. It has to be replaced by the paradigm of permanent organizational instability, as an objective and versatile phenomenon in the world of organizations, triggered by faster and faster environmental changes and turbulences. Acceptance of this new paradigm brings about an entire reorientation in organizational priorities. The main aim of companies ceases to strive for virtually impossible to obtain and See more L. Bursiak, Essentials of Organization Behaviour, podręcznik akademicki, Wydawnictwo Naukowe Zachodniopomorskiej Szkoły Biznesu, Szczecin 2013, p. 7. 10 Quoted from L. Bursiak, Essentials of…, op. cit. p. 105 as paraphrase originated from L. Clarke, The essence of change, Prentice Hall. New York, 1994, p. 6. 11 Quoted from L. Bursiak, Essentials of…, op. cit. p. 105 as paraphrase originated from J. Bray, K. Brooke. G. Litwin, Mobilizing the organization, Bringing strategy to life, Prentice Hall, New York, 1996, p. 277. 9. Zeszyty Naukowe Firma i Rynek 2014/2(47) . 19.
(4) keep for a long time ideal and permanent stability of organizational situation. Instead of this senselessness strains, organizations should put a lot of efforts into activities reducing deviations from the balance caused by organizational dysfunctions, concurrently try to maintain optimal level of effectiveness12. Dysfunctions measurements are implemented with direct reference to attained level of organizational effectiveness or ineffectiveness, in harmony with principles governing the model, regardless of the sources and locations of organizational disturbances. After evaluation of intensity (the power of influence) represented by detected dysfunctions, adequate to measurement positioning procedure is implemented. This procedure consists in cross-distribution of each company’s position on the scale of the model, within one of three explicitly dedicated phases (see figure 1). Each of these three phases consists of six distinctive characteristics of intensity (see description directly under figure 1), which make possible to place and visualize specific location being the reflection symbolized organizational situation of given researched company inside the model13. Figure 1. The concept of “The Life Cycle Model of Organizational Effectiveness Influenced by Dysfunctions”. Source: Own elaboration based on: L. Bursiak, Pozycjonowanie firm start-up na skali modelu cyklu życia organizacji – metoda eksperymentalna, [in:] A. Zelek (ed.), Nowoczesna inżynieria finansowa dla firm start-up w Polsce w latach 2009–2010 – raport z badań skreeningowych, Wydawnictwo Naukowe Zachodniopomorskiej Szkoły Biznesu, Szczecin 2013, p. 275. L. Bursiak, Pozycjonowanie firm start-up na skali modelu cyklu życia organizacji – metoda eksperymentalna, [in:] A. Zelek (ed.), Nowoczesna inżynieria finansowa dla firm start-up w Polsce w latach 2009–2010 – raport z badań skreeningowych, Wydawnictwo Naukowe Zachodniopomorskiej Szkoły Biznesu, Szczecin 2013, p. 274. 13 Ibidem. 12. 20 . Zeszyty Naukowe Firma i Rynek 2014/2(47).
(5) The first phase of the model (see “Phase I” in figure 1) embraces a belt, which symbolically represents organizational situation as fully effective with relatively small disturbances but with little by little increasing dysfunctions, having quantitative character in a wide range of influential power (characteristics of intensity: from very weak to critical). All organizational operations within the belt of effectiveness seem to be safe and are treated as comparatively secure without any grave threat for the existence of researched companies. However, when there is a lack of organizational sensitivity to occurring disruptions and, especially, when these problems are not solved as they arise and management let things drift, the dysfunctions will gradually increase, cumulate and lead to the critical point14. When negative changes go beyond the critical point, it means that dysfunctions excessively accelerate being classified as related to the second phase of the model (see “Phase II” in figure 1). This exchange brings qualitative change between the first phase where dysfunctions increase and the second phase where they accelerate. In a framework of the second phase, given researched firm enters the area of ineffectiveness which consists of two belts. The first of them is represented by the second phase itself and informs that organizational situation is ineffective but is still reversible without taking advantages of unusual means. The second one of two mentioned belts, within the area of ineffectiveness, is represented by the third phase (see “Phase III” in figure 1) which is totally irreversible without making the most of unusual means. Acceleration of dysfunctions within the framework of the second phase brings about crossing the critical point and enter the third phase of the model, in which potential uninterrupted escalation of dysfunctions can lead to start liquidation or even bankruptcy proceedings15. As opposed to phase III, diagnosed organizational ineffectiveness can be reduced and reversed exclusively on the basis of own organizational management forces, as far as it is settled within the scope of phase II, and return to phase I (effectiveness) without strive for all special means. Therefore, in phase III identical procedure is not possible without implementation accessible extraordinary means, which are much greater than conventional managerial interventions. These extraordinary means contains two groups of defensive actions. The first and the most important task to perform is to protect given company against highly probable bankruptcy which includes: regulated by low business improvement proceedings, also possible is a merge together with another legal entity (firm), split up into parts, as well as sale or liquidation. The second task to perform is creation of shield as protection against almost inescapable bankruptcy16. Figure 2 portrays central part of the model introduced in figure 1 with some vital textual changes located in the middle of the derived object of interest. The changes reflect and explain the way dysfunctions impinge on organizational effectiveness. So, in phase I of the model, existence of limitless possibilities to sustain effectiveness is unquestionable, whereas in phase II organizational prospects are also relatively limitless but only to certain extend, with clear reference to potential restoration of effectiveness. However, in the Ibidem. Ibidem, pp. 274–275. 16 Ibidem, pp. 275–276, see more S. Wrzosek Upadłość i likwidacja przedsiębiorstwa, [in:] J. Lichtarski(ed.), Podstawy nauki o przedsiębiorstwie, Wydawnictwo Akademii Ekonomicznej im. Oskara Langego we Wrocławiu, Wrocław 1995, p. 63. 14 15. Zeszyty Naukowe Firma i Rynek 2014/2(47) . 21.
(6) case of firms which business goes downhill, being classified as situated within phase III, restoration to complete organizational effectiveness is extremely difficult and require to comply with strictly limited and restricted exceptional means. Finally, It can be said that textual information introduced in the middle of the object depicted in figure 2 defines the extent to which organizational effectiveness can be sustained (within phase I) or restored (unconditionally within phase II but with serious stipulations within phase III oscillating and verging on the impossible). Figure 2. Central part of the model introduced in figure 1 with some vital textual changes. Source: Own elaboration based on: L. Bursiak, Pozycjonowanie firm start-up…,op. cit., p. 276.. The necessity, sufficiency and specificity of the research and presentation of synthesized organizational outcomes require some modifications in the middle of the derived central part of the model introduced in figure 2. For this purpose, the space with textual comments (explanations) is removed and evenly spaced for 10 horizontal row spaces added in order to symbolize ten consecutive years of the period under the research, from 2004 to 2013. Each individual row space devoted to specified year is divided vertically into eighteen columns which create within the row equal boxes – six boxes per each particular phase of the business life cycle. Only one of the boxes within the horizontal space (marked with black background) represents specified year in the model and points out the diagnosed position of given company’s organizational situation concerning the year. Additionally, two white figures, which are presented upon a black box background, display a specific position of organizational situation represented by researched company for a specific year. They consist of two last figures of the year and are settled within one specific box with black background. Figures “04” symbolize year 2004 and adequately “05” year 2005, “06” year 2006, “07” year 2007, and so on. Figures “13” symbolize year 2013, the last year of the research. As it was mentioned, figures representing given year of the research are located within the one of sixteen black boxes ascribed to each year. The particular black box is an intersection of identified row space of the model for representing consecutive years of the research with adequate column space which reflects specific level of intensity of definite feature (see characteristics of intensity in figures 1 22 . Zeszyty Naukowe Firma i Rynek 2014/2(47).
(7) and 2). As it is depict in figures 1 and 2, each specific level of intensity of definite feature is represented by capital letters arranged alphabetically. The order begins with letter “A and finishes with letter “F”. Characteristics of intensity represented by the letters mean adequately: “A” – very weak; “B” – weak; “C” – average; “D” – strong; “E” – very strong; “F” – critical. When intensity of the feature achieves critical level it shows such stratification of negative quantitative changes (dysfunctions) that it can cause qualitative change which goes beyond the critical point and, quite possibly, be classified as related to the next phase of the model. However, such situation within the third phase of the model can lead to start liquidation or even bankruptcy proceedings. In accordance with the model’s structure and assumptions, intensity of every definite feature should be symmetrically related to the level of organizational dysfunctions and organizational effectiveness or ineffectiveness. Each year within the model is treated as a one organizational life cycle from the beginning to potential closure. All consecutive years following year 2004 (until 2013 inclusively) are considered as separated life cycles. However, gathered together within the model all outcomes constitute complete, clear and integrated picture of organizational situation ascribed to every researched company during the period of time from 2004 to 2013.. The method and procedure of data collection Within the scope of this research procedure, interviewing was chosen as a key method of data collection during which top managers were asked orally a set of relevant questions about organizational situation of their company. The data was collected through direct encounters – in particular through individual interviews – and involved direct interaction with individuals on a one to one basis. These interviews were fairly informal and their participants felt they were taking part in a form of interactive, spontaneous communication, conversation or discussion rather than in a formal question and answer procedure. The benefits of this approach was that the information was richer and – at the same time – a deeper insight into the phenomena under‐researched areas was gained. Generally unstructured “in depth” interviews, or having very little structure at all, contained only a single element of structured interview. There was the practice that at the beginning of the interview, financial situation of given company based on financial statement was introduced and discussed. Future discussion was focused on the other remaining aspects of organizational performance. The collected data had to be sufficient to allow the participants to make a full assessment as to the entire organizational situation of the researched company. That is the best way of showing how linked data works. The collected and analysed data were crucial not only for the research purpose, but also for providing potential effective countermeasures against the organizational effects of dysfunctional economic activities. The list of the surveyed companies The study included the following five companies located in extreme northwestern Poland: 1. Diversified construction company (FO).. Zeszyty Naukowe Firma i Rynek 2014/2(47) . 23.
(8) 2. Seaport company delivering services associated with the loading and unloading marine vessels (TR). 3. Diversified construction and property development company (KR). 4. Construction, property development and tourism company (SP). 5. Harbour transshipment service company (PH).. Integrated presentation and interpretation of the results Diversified construction company (FO) From the beginning of the research (2004), organizational situation of diversified construction company (FO) steadily worsened up to 2009 (but still remaining within the first phase of the model). This year (2009) the build-up dysfunctions (with symmetrical distortion of effectiveness) reached a critical level (see black box “09” in figure 3). The much more rapid organizational failure arose in 2010 when the first phase of the cycle was firmly and rapidly left. What is worse, the position of organizational effectiveness was located at the end of the second phase of the model (see black box “10” in figure 3). Figure 3. Integrative model depicting organizational effectiveness of diversified construction company (FO), as a consolidated view of its organizational situation in years 2004–2014. Source: Own elaboration based on in-depth qualitative research.. 24 . Zeszyty Naukowe Firma i Rynek 2014/2(47).
(9) In view of the way things turned out, the company posing a direct threat of living the second phase and entering the third phase of the cycle were could end up in the danger zone under the threat of liquidation or even bankruptcy. However, the threat did not materialize itself because the negative trend has been stopped at the end of the second phase of the model. The mentioned organizational situation had a close relationship with the negative impact of the crisis in the construction industry with critical severity, which was not able to be compensate by the diversification of its business. In the absence of the effectiveness based on different counteractions, including diversification, there was a decision on a radical change of FO strategy. The company, being previously only a simple contractor, turned into a business organizer for other construction companies in all ranges of diversified activities. However, in a case of worsening problems with obtaining orders, the company’s goals were achieved by reducing its main activity to the role of subcontractor in construction. The management used to implement the way of doing business as the subcontractor in construction only when the company struggled to survive, during periods of temporary lull in the principal business activity, at the same without ceasing in search of new market opportunities. More flexible approach to the business, led to a qualitative change showing a broader organizational perspective. This strategy, launched in early 2011 brought very good results dramatically improved company’s level of organizational effectiveness (see black box “11” in figure 3). In 2012 and 2013 there were some problems with payments for services performed for Polish companies, causing financial difficulties worsening little by little organizational effectiveness. (see black boxes “12” and “13” in figure 3). The difficulties were largely compensated by the use of prepayments and greater involvement in construction services in the nearest German towns. Seaport company delivering services associated with the loading and unloading marine vessels (TR) TR from the beginning of the research (2004) steadily improved its organizational situation up to 2008 (within the first phase of the model). However, newly appointed chief of the company over seven months led the company to the edge of bankruptcy (see black box “09” in figure 4). Fortunately, another change on this positon saved the company from bankruptcy and restore its organizational effectiveness to its original state. After this restoration, thanks to radical organizational improvement, the company’s position within the model was situated at the very beginning of the first phase of the cycle (see black box “10” in figure 4). Over the next three years There was an increase in the activity of the service and associated revenues which were not quite enough to compensate fully for the revenue expenditure. The early years of Poland’s accession to European Union did not brigs much but a real blessing for the TR company was the Polish membership in the Schengen Zone (December 21 2007). Since then, Poland has become a part of a land with no impediments to the movement of people and cargo. Almost all former problems with border and custom controls suddenly disappeared. That way, many seaport operations have been facilitated.. Zeszyty Naukowe Firma i Rynek 2014/2(47) . 25.
(10) Figure 4. Integrative model depicting organizational effectiveness of seaport company delivering services associated with the loading and unloading marine vessels (TR), as a consolidated view of its organizational situation in years 2004–2014.. Source: Own elaboration based on in-depth qualitative research.. Diversified construction and property development company (KR) At the beginning of the research length of time in 2004 KR company was under very strong pressure of dysfunctions and had been classified at the end of the second phase of the model (see black box “04” in figure 5). Since 2005 the company had steadily improved its organizational situation up to 2009 (within the first phase of the model). Organizational situation of the company did not pose a real danger of a return to the second phase of the cycle, because at that time the company was preparing itself for the action under the new investment regime and was remodelled to its needs. Very flexible business operations in adjusting the offer to current market trends were giving guarantees to achieve good results and adapt the company to the changed market requirements. During the following years the KR company was able to perform a lot of investment from their own resources that additionally made it resistant to recession, because the company were following business a powerful maxim or mantra “cash is king during a recession” and did not forgot that also “profit is king”. This company is a clear example that the recession does not have to be a factor in destroying organizational effectiveness when is able to use previously developed organizational strengths. Diversified construction and property development company (KR) The company makes extensive use of the possibility of attracting customers from the European market. 26 . Zeszyty Naukowe Firma i Rynek 2014/2(47).
(11) Figure 5. Integrative model depicting organizational effectiveness of diversified construction and property development company (KR), as a consolidated view of its organizational situation in years 2004–2014.. Source: Own elaboration based on in-depth qualitative research.. Construction, property development and tourism company (SP) SP company is the only one of the previously presented companies that throughout the hole period of its economic activity was not found outside the first phase of the model. What is more, this company was not even come close to the danger zone located at the end of the first phase of the business life cycle (see figure 6). The company was evolving flexible processes to fit market circumstance that the recession stopped to be any significant threat. For the company prosperity is just a period of „ charging organizational batteries „ The company has a widely diversified core business, which became immune completely to the impact of the current recession. The facts are confirmed and reflected in the results of organizational effectiveness indicated in figure 6. The company is focused on the sphere of activity, which ensures adequate effectiveness and compensates for losses incurred due to recession and minimized them to the necessary scope of the activities covered by the downturn in the given time. Very high flexibility allows the company to maintain high operational effectiveness, regardless of economic fluctuations.The company acquire customers from the European market and makes use of the facilities of the Schengen Zone because the Schengen area represents a territory where the free movement of persons is guaranteed. The signatory states to the agreement have abolished all internal borders in lieu of a single external border.. Zeszyty Naukowe Firma i Rynek 2014/2(47) . 27.
(12) Figure 6. Integrative model depicting organizational effectiveness of construction, property development and tourism company (SP), as a consolidated view of its organizational situation in years 2004–2014.. Source: Own elaboration based on in-depth qualitative research.. Harbour transshipment service company (PH) At the beginning of the research duration time in 2004 PH company was under very strong pressure of dysfunctions and had been classified at the end of the second phase of the model (see black box “04” in figure 7). The next year there was a relative improvement , which in the following years 2006 and 2007 did not protect the businesses from serious organizational deterioration (see black boxes “06” and “07” in figure 7). The result of this collapse was the threat of irreversibility (without the use of emergency measures) of the status of organizational ineffectiveness and the looming specter of bankruptcy in the near future. The company turned out to be very sensitive to the downturn in the port cargo handling segment subject to its core business. The company was virtually defenseless against cyclical effects , and an arsenal used by its preventive measures was completely ineffective in the face of the transshipment problems in supply. However, the extraordinary action taken with the help of new shareholders helped to overcome the ensuing crisis situation. Complete reversal of organizational emergency and a turning point of reversal organizational improvement occurred in 2008 with deterioration in 2009. The following years were quite effective in the business activities of PH company. The access to EU is neutral for the company. 28 . Zeszyty Naukowe Firma i Rynek 2014/2(47).
(13) Figure 7. Integrative model depicting organizational effectiveness of harbour transshipment service company (PH), as a consolidated view of its organizational situation in years 2004–2014.. Source: Own elaboration based on in-depth qualitative research.. Conclusions The data collected in the course of the study are useful because may explain the potential distortions and contribute to finding adequate measures for correcting negative organizational situations and improve organizational effectiveness in researched companies. The Business Life Cycle Model of Organizational Effectiveness Influenced by Dysfunctions was very helpful as measuring instrument and grading system, which helped to introduce the results of the research work. Some of the researched companies conducting their businesses benefited from Polish accession to the European Union. However, these advantages were very limited and confined to: 1. The difficulties the difficulties encountered by diversified construction company (FO) were largely compensated by the use of prepayments and greater involvement in construction services in the nearest German towns. 2. Since Poland has become a part of a land with no impediments to the movement of people and cargo, for seaport company delivering services associated with the loading and unloading marine vessels (TR) almost all former problems with border. Zeszyty Naukowe Firma i Rynek 2014/2(47) . 29.
(14) and custom controls suddenly disappeared and, that way, many seaport operations have been facilitated. 3. Diversified construction and property development company (KR) makes extensive use of the possibility of attracting customers from the European market. 4. Construction, property development and tourism company (SP) acquire customers from the European market and makes use of the facilities of the Schengen Zone because the Schengen area represents a territory where the free movement of persons is guaranteed.. Sytuacja organizacyjna wybranych firm polskich po akcesji do UE Streszczenie Celem artykułu jest przedstawienie wyników badań, prowadzonych na podstawie autorskiej procedury diagnozowania i pozycjonowania sytuacji organizacyjnej przedsiębiorstwa. Badaniami objęto wybrane polskie firmy funkcjonujące w latach 2004-2013. Jednym z celów prowadzonych badań było określenie konsekwencji członkostwa Polski w UE dla badanych firm. Diagnoza efektywności organizacyjnej lub potencjalnej nieefektywności opiera się na jakościowej, pogłębionej analizie wieloaspektowych obszarów funkcjonowania organizacji, które mają charakter autorskiego modelu, prezentującego dysfunkcje organizacyjne. Wyniki badań diagnozują wydajność organizacyjną danej firmy tak w ujęciu rocznym, jak i w całym badanym okresie. Słowa kluczowe: cykl życia organizacji, diagnoza organizacyjna, sytuacja organizacyjna, pozycjonowanie, efektywność organizacyjna, nieefektywność, dysfunkcje organizacji. 30 . Zeszyty Naukowe Firma i Rynek 2014/2(47).
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